By Edward West Time of article published2h ago

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CAPE TOWN – Black-empowered information and communications technology group AYO Technology Solutions lifted headline earnings per share by 25 percent to 35.81 cents per share in the six months to February 29 and posted a net asset value of R4.5 billion.

AYO has more than 1 200 employees and more than 500 clients in both the public and private sector, with operations in South Africa, Mauritius, East Africa and the UK.

Chief executive Howard Plaatjes said in a phone interview that it was a strong interim performance despite a challenging operating and economic environment and he was cautiously optimistic about the second half.

While the Covid-19 pandemic might affect turnovers and it was difficult to fight a negative economy, ICT services in general, are essential services, he said. 

The group’s quality acquisition targets that have been pre-identified have now reached the appropriate level for AYO to actively invest its significant cash balances, particularly at this time, Plaatjes said.

The Covid-19 pandemic has created a number of excellent opportunities for AYO’s investments, such as cybersecurity, e-learning, remote working, e-commerce, and health care. As an example, its Headsets subsidiary has gained strength through the lockdown as companies have invested in upgrading their employees’ home-based working experience.

The improved performance was mainly due to organic growth, as well as including the six months results of Sizwe IT Proprietary (Sizwe), SGT Solutions Proprietary (SGT Solutions), and Global Command and Control Technologies Proprietary (GCCT), according to Plaatjes.

In the prior period, the group had consolidated the results of Sizwe for only two and a half months, as it was acquired on December 19, 2018. Also, the results of SGT Solutions and GCCT were not included in the prior period, as SGT Solutions was acquired on February 28, 2019, and GCCT on March 1, 2019. An interim dividend of 35 cents was declared.

AYO has several subsidiaries that have been in operation for more than 20 years, and these had delivered both satisfactory trading performance and dividend income for AYO.

The software and consulting division pre-tax profit fell to R3.5 million from R4.8m mainly as a result of ICT cost-cutting by a major customer.

In the security solutions division, revenue increased 34.3 percent to R190m after a consolidation of a 100 percent-held subsidiary from August, following the acquisition of 43 percent of the subsidiary shares not previously held. In the unified communications division, revenue was up 2.19 percent to R39m due to increased demand for products and revenue from new brands.

In the tracking solutions division, which reported a R10.5m pre-tax loss, the focus was on rapidly expanding into other Africa markets. In the managed services division, which includes Sizwe and SGT Solutions, revenue shot up to R1.02bn from R425m, and pre-tax profit came to R20.9m versus a previous pre-tax loss of R17.9m for the division


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